Daily Briefing – 331

Post: Jun. 27, 2021

Infrastructure: Deal… No Deal… Deal…

President Joe Biden struck a major bipartisan deal on infrastructure — or did he?

“We have a deal,” Biden said on Thursday, announcing a $1.2 trillion infrastructure package that had the support of key Republicans and centrist Democrats. “We made serious compromises on both ends.” Then, Biden also said he was so committed to a second, separate infrastructure bill containing liberal policy priorities they planned to pass with only Democratic votes that he would not sign the compromise legislation unless the other passed too.

Why would Republicans vote for a $1 trillion bill some conservative activists already oppose if its passage is contingent on the enactment of a package containing many of the provisions they had stripped out during the negotiation process? The president has since walked back his “tandem” comment, and some Republicans have accepted that, but the damage appears to have been done.

Unemployment Roles Drop Faster in States that Reduced Benefits

The number of unemployment-benefit recipients is falling at a faster rate in Missouri and 21 other states canceling enhanced and extended payments this month, suggesting that ending the aid could push more people to take jobs. Other economists and many Democrats say other factors, including lack of child care and fear of Covid-19, are also keeping many potential workers out of the labor force.

Midas Hospitality, a St. Louis-based hotel company with 44 locations around the U.S., started holding job fairs to increase staffing as coronavirus restrictions eased about two months ago. In many cases, no one showed up, said Linda Eigelberger, senior vice president for operations and marketing. Then a few weeks ago, things began to change at its Missouri locations. “It’s crazy how quickly” things seem to be ramping up, she said, noting that workers in other states where Midas operates and the federal benefits are still in place appear reluctant to re-enter the workforce.

Consumer Prices Surge Again

A key measure of U.S. inflation rose sharply again in May and showed prices rising at the fastest annual pace since 2008, signaling consumers can expect to pay more for goods and services over the summer as the economy recovers from the pandemic. The so-called PCE prices index climbed 0.4% in May to mark the third straight big increase, new government figures show. Over the past year consumer prices have shot up 3.9%, reflecting the biggest gain since 2008.

A separate measure of inflation that strips out food and energy also climbed to the highest level since 1992. The core PCE price index moved up 0.5% in May. That nudged the increase over the past 12 months to 3.4% from 3.1%.

US Consumer Spending Flat in May

U.S. consumer spending paused in May as shortages weighed on motor vehicle purchases, but the supply constraints and increased demand for services helped to boost inflation, with the Federal Reserve’s main inflation measure posting its biggest annual increase since 1992.

The Commerce Department said on Friday that the unchanged reading in consumer spending, which accounts for more than two-thirds of U.S. economic activity, followed an upwardly revised 0.9% jump in April. Consumer spending was previously reported to have increased 0.5% in April. Economists polled by Reuters had forecast consumer spending would rise 0.4% in May.

NYS Vaccine and COVID Update – Number of Patients in ICU Statewide Falls Below 100 For First Time Since Pandemic Began

Vaccine Stats as of Sunday morning:

One Vaccine Dose

59.6% of all New Yorkers – 11,465,094 (plus 18,709 from a day earlier)
In the Hudson Valley 1,218,525 (plus 1,503)

Fully Vaccinated

53.1% of all New Yorkers – 10,441,053 are fully vaccinated (Plus 59,643)
In the Hudson Valley – 1,099,951 (plus 2,157) are fully vaccinated.

The Governor updated COVID data through Saturday June 26th. There were 4 COVID related deaths for a total of 42,961.

Hospitalizations:

Patients Currently in Hospital statewide: 330

Seven Day Average Positivity Rate:

Statewide 0.38%
Mid-Hudson: 0.34%

Useful Websites:

US COVID Update – CDC: Delta Variant Increasingly Present

The CDC updated its SARS-CoV-2 genomic surveillance data, adding official data for May 23-June 5 and projections for June 6-19. Including the new projection period, the Delta variant (B.1.617.2) prevalence has increased from less than 1% to 20.6% over a period of 8 weeks, more than doubling in every 2-week period. Based on the current projection, the Delta variant is now the #2 variant nationwide.

Gamma variant (P.1) prevalence also continues to increase steadily, now up to 16.4% of new cases. While still technically dominant based on the estimated prevalence, Alpha variant (B.1.1.7) prevalence has noticeably decreased over the past 2 reporting periods, down from a high of 70% to 52.2% in the June 6-19 projection. These genomic data provide further evidence that the Delta variant is poised to become the dominant variant in the US over the coming weeks. In fact, the projection indicates that Delta is already the dominant variant in HHS Regions 7 (Central; 47.5%) and 8 (Mountain; 46.4%).

Moderna Applies to F.D.A. for Full Vaccine Authorization

Moderna last week became the latest pharmaceutical company to apply to the U.S. Food and Drug Administration for full approval for its Covid-19 vaccine for use in people 18 and older. F.D.A. approval would allow the company to market the shot directly to consumers, and could also help raise public confidence in the vaccine.

Full approval could also make it easier for schools, employers, government agencies and the U.S. military, which has encountered resistance to coronavirus vaccines, to mandate vaccinations. Last month Pfizer and BioNTech applied to the agency for full approval of their vaccine for use in people 16 and older.

Where Might a Future Coronavirus Pandemic Begin?

Scientists fear dramatic land-use changes could spur the evolution of zoonotic diseases such as COVID-19. A new map identifies where these future outbreaks might occur—which could be a valuable tool in preventing them.

Researchers analyzed more than 28.5 million square kilometers of land densely populated by Asian horseshoe bats, which live in tropical and temperate regions and are named for their large, lance-shaped noses. In total, the researchers studied more than 10,000 locations. They found areas in China to be the hottest spots, and say some areas in other parts of Asia—including Japan, Thailand, and the Philippines—and Europe could turn into hot spots.

The Post-Pandemic Comeback: How Far Are We From “Normal?” E.J. McMahon Offers Some Answers

Now that the COVID-19 “emergency” is officially in the rearview mirror, how far is New York’s economy from its pre-pandemic normal level of employment and business activity? And how does this compare to other states?

In normal times, the economic rebound from some recessionary low point can be most closely tracked by focusing on monthly federal and state employment statistics that have been “seasonally adjusted” to reflect the economy’s well-established cycles of production and consumption. However, those cycles were severely disrupted during the pandemic, as the economist Alan Blinder pointed out in this recent Wall Street Journal commentary. The subhead on his piece sums up the problem: “How do you seasonally adjust for a socially distanced Christmas?”

Deloitte Survey: CEOs Remain Optimistic About the Economy

Fortune has a new poll of CEOs out conducted in collaboration with Deloitte. The big takeaway is surprising optimism about the economy. Some details:

53% of the CEOs believe the business effects of the pandemic “will largely be over by the end of 2021.”
77% of CEOs expect their organizations growth to be “very strong” or “strong” over the next 12 months.
82% expect to increase spending on technology modernization.
Asked in an open-ended question to name the biggest challenge they face, the CEOs mentioned “talent” more than anything else.
Cybersecurity was also top of mind, with 86% saying it is “highly” or “moderately” relevant to their agenda. Cryptocurrency ranked at the bottom, with only 16% ranking it “highly” or “moderately” relevant.
Three-quarters of CEOs believe corporate taxes are likely to rise, but concern over tax issues (only 60% said it was “highly” or “moderately” relevant) was significantly below concern over social issues (73%), and only modestly higher than concern over climate (56%).

Timmons: Manufacturers Face Labor, Supply Hurdles

Labor shortages and outsized demand are contributing to increased prices and supply disruptions, a trend that is “causing bottlenecks in a lot of the supply chain for manufacturers who make the finished goods,” says National Association of Manufacturers CEO Jay Timmons.

Manufacturing saw open positions decline initially during the pandemic, but that figure has more than doubled in recent months, Timmons says. The nation’s manufacturing skills gap, which is expected to result in 2.1 million unfilled jobs by 2030, could cost the U.S. economy as much as $1 trillion, according to a new study by Deloitte and The Manufacturing Institute. Manufacturers in the U.S. need to fill 4 million jobs by 2030, the study showed.

411,000 Americans Filed New Unemployment Claims Last Week, Continuing Claims Fall

New weekly jobless claims resumed declining last week but by a smaller than expected margin, underscoring the still-choppy recovery in the U.S. labor market. Thursday’s report reflects a back-to-back week with new jobless claims above the psychologically important 400,000 level. The four-week moving average for new claims also moved up slightly, rising by 1,500 to 397,750.

Initial jobless claims, week ended June 19: 411,000 vs. 380,000 expected and an upwardly revised 418,000 during prior week.
Continuing claims, week ended June 12: 3.390 million vs. 3.460 million expected and an upwardly revised 3.534 million during prior week

The Natural-Gas Glut Has Evaporated, Driving Prices Higher

Natural-gas prices are starting the summer air-conditioning season nearly twice as high as they were a year ago. Demand for the fuel is picking up as the world’s economies reopen and as Americans dial down their thermostats for what is expected to be a hot summer. Meanwhile, U.S. producers have stuck to the skimpy drilling plans they sketched out when prices were lower, eliminating the glut that was keeping them depressed.

Natural-gas futures ended Friday at $3.215 per million British thermal units, up 96% from a year ago and the highest price headed into summer since 2017. Futures traded even higher—and regional spot prices jumped—when triple-digit temperatures baked the Southwest earlier this month. Analysts expect prices to be even higher later in the year when it is time to fire up furnaces.

Business Groups Diplomats Urge Biden to Lift Europe Travel Ban

The Biden administration is under pressure from a major business group and diplomats to scrap a travel ban on Europeans, as investment from the continent in the United States plunged by nearly a third last year. The US Chamber of Commerce on Friday urged Washington to allow the return of European travelers “as soon as possible.”

While countries in the European Union have reopened their borders to Americans who are vaccinated or test negative for Covid-19, the United States has not reciprocated, to the frustration of the business world.

Perseverance Rover Begins Its Search for Life on Mars

NASA’s latest Mars rover is done with its testing and has embarked on its first scientific mission. After landing on the planet in February, the Perseverance rover has been busy trying out its many instruments—converting atmospheric carbon dioxide into oxygen that would be needed for manned missions, flying a helicopter and taking photos.

The rover is packed with 23 cameras, sensors, a laser and a drill-equipped robotic arm. NASA scientists will spend the next two years using the instruments to learn more about Jezero Crater and home-in on areas they might like to study in greater depth.

How COVID-19 is Inspiring Education Reform

Covid-19 disrupted education on a scale never seen before. By mid-April 2020 more than 90% of the world’s learners had been locked out of classrooms. Closures have lasted months, harming children’s learning (see chart 1), safety and well-being. Yet as youngsters in rich countries—the focus of this briefing—return to their classrooms, reformers hope the shock will lead to changes that will make schools more efficient, flexible and fair.

The experiences of covid-19 will probably embolden reformers who argue that schools need to do more to develop resilience in children to help them cope with shocks. Pupils who were spoon-fed by their teachers before the pandemic have found remote learning hardest, thinks Andreas Schleicher of the oecd. He says this shows that schools should be helping children learn independently, in preparation for a future in which technological disruption forces professionals to retrain frequently.

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